Broadcom (BRCM, Financial) witnessed significant traction for its broad range of product offerings that include wireless connectivity, broadband access and set-top box. It continues to see considerable growth in set-top box. The major strength for the quarter was primarily due to significant share gains in developing markets offering innovative HD designs, mainly in Latin America. Broadcom also recorded solid traction in VDSL owing to share gains, a wider range of technologies like channel bonding and vectoring and rising operator spending. Broadband access for the copper platform is under up gradation and the successive DSL standard.
The way ahead
In connectivity, Broadcom experienced seasonally strong demand coupled with expanding adoptions of innovative wireless technologies like 2x2 and 802.11ac solutions driving greater ASPs. In the quarter Broadcom introduced the next-generation of its 2x2 MIMO 802.11ac combo chip which enhances its already superior performance for advanced tablets and smartphones leading to higher speeds, reduced power consumption, smaller interference and least board space compared to competition. At present, it is producing and supplying in significant volumes.
Broadcom also introduced its GPS Sensor Hub Combo Chip, unique in the industry. This product considerably lowers the power consumption in tablets and smartphones whereas allowing always on lifelogging and health fitness applications.
Broadcom recently announced the unique and industry-leading first Global Navigation Satellite System (GNSS) location hub that enables Galileo which is a worldwide satellite system being developed by the European Union.
The Broadcom BCM4774 concurrently supports BeiDou, QZSS, SBAS, GLONASS, GPS and Galileo satellite systems.
Gaining strong traction
Broadcom’s latest OP6000 Digital Front-End (DFE) processor family, delivers supreme linearization performance for 2G, 3G and 4G protocols and expands the capability for base station design, leverage and management for meeting the Multi-Protocol demand. These advanced processors have ability to process several protocols concurrently and thus creating flexible platforms to adapt vigorously to the rapidly changing potential network requirements.
Considering infrastructure, Broadcom’s networking group and infrastructure remained constant reducing nearly less than 1% on a sequential basis to $651 million as per its expectations. Both service provider and data center revenue fell sequentially, partially balanced by healthy growth in the home and enterprise market.
The home and enterprise market grew significantly primarily due to rising traction from its wireless LAN routers, processor SoCs and enterprise access points enabled by expanding utilization of 802.11AC.
Broadcom’s long-term growth drivers are unshakeable and comprises of fresh build out and development of datacenter, expanding data traffic and higher speeds and the ongoing ASIC conversions to merchant solutions. Lately, Broadcom introduced the unique offering of switch products referred as Tomahawk, which offers 32 ports of 100 gigabit Ethernet and is specially crafted for 25 and 100 gig applications in the datacenter.
Conclusion
Hence, on the back of traction in several end-markets, Broadcom's performance will continue improving in the future. So, investors should remain invested in the stock for the long run.
